TMI Blog2013 (12) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the finding of fact remains the same as were available to the Assessing Officer - Part deduction of tax on certain payments do not lead to the finding that all the expenditures incurred were susceptible to be disallowed under section 40(a)(ia) for want of deduction of tax at source – Decided against Revenue. - - - - - Dated:- 25-4-2012 - Order The order of the Bench was delivered by K. K. Gupta (Accountant Member).-The Revenue has filed this appeal against the order dated October 24, 2011, of the Commissioner of Incometax (Appeals) for the assessment year 2008-09 raising the following grounds : "1. Whether, on the facts and circumstances of the case the learned first appellate authority is justified to hold that the statutor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idering the facts as well as the submissions of the assessee, upheld the addition of Rs. 1,10,704. However, for reasons discussed in paragraph 6.1 of his order, the learned Commissioner of Incometax (Appeals) deleted the disallowance/addition of Rs. 21,05,583 made under section 40(a)(ia), which is reproduced as under : "6.1. In Indwell Constructions v. CIT [1998] 232 ITR 776 (AP), the hon'ble Andhra Pradesh High Court held (headnote) 'the pattern of assessment under the Income-tax Act is given by section 29 which states that the income from profits and gains of business shall be computed in accordance with the provisions contained in sections 30 to 43D. Section 40 provided for certain disallowance in certain cases notwithstanding that tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 144 and therefore, estimation of income cannot be a bar for finding that the expenditure have been incurred without deduction of tax at source. The Assessing Officer may have initiated proceedings under section 201 which fact has not been brought on record by the learned Commissioner of Income-tax (Appeals). He fully supported the impugned order of the Assessing Officer and prayed the disallowance under section 40(a)(ia) as made by him may be confirmed. Learned counsel for the assessee submitted that the grounds of appeal taken by the Department are misconceived and do not arise out of the order of the Commissioner of Income-tax (Appeals). He contended that the learned Commissioner of Income-tax (Appeals) has followed the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income-tax (Appeals) as the decision of the Andhra Pradesh High Court and the Hyderabad Bench of the Tribunal squarely covers the issue involved and is binding. Learned counsel for the assessee further relied on the following decisions. 1. Union of India v. Raghubir Singh [1989] 178 ITR 548 (SC) ; 2. The Society of Presentation Sisters v. ITO [2009] 318 ITR (AT) 287 (Cochin) ; 3. Union of India v. Kamlakshi Finance Corporation Ltd., AIR 1992 SC 711 ; 4. CIT v. Belpahar Refractories Ltd. [1981] 128 ITR 610 (Orissa) ; and 5. Sayaji Iron and Engg. Co. v. CIT [2002] 253 ITR 749 (Guj). Learned counsel for the assessee further submitted that even otherwise the issue involved in this case has been decided in favour of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions cited at Bar, we are inclined to find the contention of learned counsel for the assessee appropriate to the extent the learned Commissioner of Income-tax (Appeals) has taken into cognizance the facts leading to the disallowance of the expenditure under section 40(a)(ia) by the Assessing Officer when he sought to consider the rejection of books of account taking recourse to section 145(3) of the Income-tax Act as the Assessing Officer was to pass the order under section 144. Having estimated the income from book publishing by enhancing the net profit as otherwise returned by the assessee on the basis of the financial statements submitted along with the return with form 3CD, the Assessing Officer tried to indicate that the relevant exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee subjected to deduction of tax at source. He rightly held that section 40(a)(ia) provides for certain disallowances in certain cases notwithstanding that those amounts are generally allowed under the general section. The computation under section 29 has to be made under section 145 on the basis of books of account regularly maintained by the assessee which the Assessing Officer did by estimating the profit at 5 per cent. of the sales. Learned counsel for the assessee has relied on the decision of the Income-tax Appellate Tribunal, Hyderabad in the case of Teja Constructions v. Asst. CIT [2010] 5 taxmann.com 61 (Hyd-ITAT) ; 129 TTJ (Hyd)(UO) 57, which is squarely applicable to the facts of the assessee's case when the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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